Basic Course

STRATEGIES FOR BEGINNER

Day trading, position trading, swing trading, and scalping are four popular active trading methodologies.

POSITION TRADING

Position trading is a popular long-term trading strategy​ that allows individual traders to hold a position for a long period of time, which is usually months or years. Position traders ignore short-term price movements and prefer to rely on more precise fundamental analysis​​ and long-term trends.

KEY TAKEAWAYS

  • Learning how to trade the financial markets begins with educating oneself on reading the financial markets via charts and price action.
  • Use technical analysis, in conjunction with fundamental analysis, to decipher price action.
  • Practice makes perfect or, at the very least, it allows the neophyte to test out theories before committing real funds.

DAY TRADING 

There has been a lot of talk recently about day trading. Some tout it as a way to make big money fast and others have unfortunately fallen victim to the risks of engaging in this type of speculative investing. If you are thinking about day trading, I urge you to think again. Day trading is serious business and not something you just dabble in for fun, particularly if you are using leveraged investment strategies or trading leveraged products.

SWING TRADING 

Swing Trading is a strategy that focuses on taking smaller gains in short term trends and cutting losses quicker. The gains might be smaller, but done consistently over time they can compound into excellent annual returns. Swing Trading positions are usually held a few days to a couple of weeks, but can be held longer.

KEY TAKEAWAYS

  • Options trading may sound risky or complex for beginner investors, and so they often stay away.
  • Some basic strategies using options, however, can help a novice investor protect their downside and hedge market risk.
  • Here we look at four such strategies: long calls, long puts, covered calls, and protective puts.

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